Profiteering - Research Article from Americans at War

World War I

Concerns about profiteering were the strongest before, during, and after the First World War. The "Merchants of Death" theory, accusing arms dealers of working behind the scenes to encourage war, was popularized by progressives and isolationists active in the antiwar movement prior to America's entry into the war. In the 1930s, evidence collected by the Senate committee headed by Senator Gerald Nye showed only that munitions dealers were quick to take advantage of the new markets that the outbreak of war in Europe created in 1914. Some American companies made truly staggering profits supplying the Allies. Du Pont, which manufactured smokeless gunpowder, doubled its price in 1915 and saw its annual profits skyrocket from $5 million to $82 million. The J. P. Morgan banking firm earned $30 million for its work as purchasing agent for the British. When the Allies ran short of cash in 1915, they began to borrow money from...